With Chinese Loans Coming Due, Ethiopia Moves Forward With Ethio Telecom Privitization Plan

The Ethiopian government is moving forward with plans to sell off a 45% stake of the state-owned Ethio Telecom along two more telecom licenses even though this may not be the best time to do that given the weak economy and the escalating conflict in the northern Tigray region.

Telecom companies including Orange, Vodacom, Safaricom and MTN are all lining up to buy into one of Africa’s largest yet still underdeveloped telecommunications markets, but Ethiopian telecoms specialist Terrefe Ras-Work warned in an interview with The Africa Report that the “timing is off” for privatization: “We first need economic and political stability. […] If we are selling because of debt, let’s at least do it at a better time,” he said.

The debt that Ras-Work referred to was a $3.1 billion Chinese loan to build out Ethiopia’s network communications infrastructure and that’s now coming due, forcing the government to move forward regardless of the circumstances. “It is too late [to delay the liberalization],” said Alexander Demissie, founding director of China Africa Advisory, “Ethio Telecom has borrowed $3.1bn from China to build its infrastructure and has only paid a small portion,” he said.

Read more on this story on The Africa Report website.

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The post With Chinese Loans Coming Due, Ethiopia Moves Forward With Ethio Telecom Privitization Plan appeared first on The China Africa Project.



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